CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money before trading CFDs.

USD/CAD Bulls Are Running Out of Momentum Above 1.3000

May 11, 2022

Talking Points:

  • USD/CAD trades sideways after regaining an 18-month high and testing a four-day upswing.
  • The immediate gain is being challenged by an overbought relative strength index (RSI) and a monthly resistance line.
  • Bears remain wary above the 200-day simple moving average (SMA), but weekly support holds the key to a short-term drop.

During today’s early Asian trading session, USD/CAD bulls take a breather around the 18-month high, holding around 1.3030.

The recent pause in the loonie pair tests the four-day rise that took it to its highest levels since November 2020.

The overbought RSI, however, prevents USD/CAD bulls from breaking through a one-month-old rising trend line barrier, which was at 1.3045 at the time of publishing.

If the pair ignores technicals and rallies past 1.3045, a challenge to the mid-November 2020 high of around 1.3175 isn’t out of the question.

Meanwhile, a one-week rising trend line, close to 1.3015, precedes the psychological magnet of 1.3000, limiting the USD/CAD’s immediate downside.

The 50-day SMA and an upward sloping trend line from the 21st of April also serve as short-term vital support around 1.2875 and 1.2815, respectively.

It’s worth mentioning that the 200-day SMA level of around 1.2660 serves as the USD/CAD bulls’ last line of defence if the pair falls below 1.2815.

USD/CAD Four-Hour Chart:


Open an Account. Get started in less than 5 minutes